The TPP’s real value — it’s not just about trade
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President-elect Donald TrumpDonald John TrumpJulián Castro: It's time for House Democrats to 'do something' about Trump Warren: Congress is 'complicit' with Trump 'by failing to act' Sanders to join teachers, auto workers striking in Midwest MORE recently reaffirmed his plans to abandon the Trans-Pacific Partnership (TPP), a treaty that links the United States with 11 Pacific Rim economies. He argues that trade agreements are a “disaster” for American workers and should be scrapped.

Many trade lawyers and economists disagree. They caution that retreating from the global economy reduces the market access enjoyed by American exporters and raises the costs that consumers pay at home.

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Which side of this argument is right? 

The true value of trade agreements is often overlooked. Treaties like the TPP are about far more than market liberalization. They provide a vital diplomatic tool through which the U.S. promotes its broader foreign policy agenda. As such, abandoning these commitments is not just an economic mistake — it fundamentally limits America’s role in the international community.

Consider the contents of modern trade treaties.

Treaty mandates expanded significantly after the creation of the World Trade Organization. Prior to 1995, most treaties were little more than a schedule of tariff concessions. They included very few issues not related directly to trade. Recent deals, by contrast, govern a wide variety of policies. 

The TPP is no exception. Numbering 5,000 pages, it touches on a range from human rights and labor regulations to product safety standards and intellectual property. In fact, the same is true of all U.S. agreements, including the Transatlantic Trade and Investment Partnership, the proposed deal between the U.S. and the European Union. 

Including these diverse provisions may seem unnecessary. It isn’t. The TPP offers the U.S. a way to extend its domestic regulations to key trade partners.

Note, for example, that TPP exports stringent domestic regulations relating to bribery and other forms of corruption. The goal is promoting transparency and good governance among trade partners through the TPP’s additional monitoring and enforcement mechanisms. The deal also ensures that the legal rights that U.S. firms enjoy at home are protected abroad, helping insulate American enterprises from some of the risks associated with doing business overseas. The agreement even helps guarantee that animal and plant products meet U.S. health and safety standards. 

Why are these features relevant to American interests? 

The TPP’s rules aren’t just important because they facilitate trade. They harmonize policies and stabilize relations between the U.S. and its key partners. It’s no coincidence that the Office of the U.S. Trade Representative stresses the TPP’s strategic benefits. The agreement ensures that America plays an active part in shaping international law.

Of course, not everyone is happy with the TPP’s broad mandate. Trump and his supporters claim that trade agreements overreach and that the U.S. has forfeited too much sovereignty by signing similar treaties. But that logic is flawed for two reasons.

First, trade agreements are not imposed upon the U.S. against its will. If anything, the opposite is true. The U.S. heavily influences the terms of its commitments. In fact, America’s heavy hand in designing the TPP is precisely why global leaders are reacting to Trump with dismay, with some calling it “meaningless” if the U.S. steps away.

Such responses are no surprise. The TPP is a U.S.-led initiative and it can only work effectively with America’s participation. For evidence, look no further than the nervous reactions many Pacific Rim leaders had to the contentious “fast track” renewal process in June 2015. Their fear was precisely that Congress would torpedo the deal by endangering U.S. involvement. 

Second, critics ignore the larger geopolitical implications of tearing up the agreement.

The TPP is partly an artifact of the Obama administration’s “pivot” to East Asia. This policy marked an effort to solidify U.S. influence in Asia and to balance against China. Whatever his political differences with Obama, Trump should see the virtues of retaining America’s diplomatic foothold in the region.

Trump took every opportunity to criticize China during his campaign. If he is truly concerned with China, then his strategy is irrational. Abandoning the TPP would mean leaving Asia in the hands of his supposed rival. The results can only harmful for American interests. 

How should Trump proceed?

Certainly no one argues that the TPP is perfect. Implementation and enforcement issues can endanger the effectiveness of any trade agreement. The TPP cannot promise to solve all labor rights abuses or to reverse environmental degradation. There is still a reasonable debate to be had about these issues and others.

But trade agreements do not have to be perfect. A rules-based system is better than an economic and political Wild West. The U.S. should continue to help write the rules of the game.

This is Trump’s principal mistake. He thinks that the U.S. can still score points while sitting on the sidelines. That strategy is going to backfire. Critics of free trade should be less worried about forfeiting U.S. sovereignty and be more worried about throwing away an opportunity to promote America’s regulatory and geopolitical influence.

That way, even if American firms don’t win every game, at least they aren’t playing under someone else’s rules.

 

Jeffrey Kucik is an assistant professor in the Colin Powell School at the City College of New York.


The views of Contributors are their own and are not the views of The Hill.